Google Australia taps News Ltd for new MD

Julian Lee

GOOGLE has raided the senior ranks of News Ltd for its new managing director as the technology company looks to boost its share of the $2.2 billion online ad market and meet the possible threat of regulatory intervention.

Nick Leeder, 41, deputy chief executive of The Australian, joins Google Australia and New Zealand as managing director at the end of March, replacing Karim Temsamani who left in October for a senior role at its Californian headquarters.

Mr Leeder's defection to Google - which News Corp executives have labelled as ''parasites'' for aggregating content without paying for it - will be a blow to News Ltd.

Mr Leeder, who joined News Ltd from Fairfax in 2006, is right-hand man to Richard Freudenstein, The Australian's chief executive and the man often spoken about as a successor to News Ltd chief executive John Hartigan.

Advertisement

The former McKinsey consultant, whom colleagues describe as a quiet achiever, was unwilling to be drawn on his priorities at Google. ''At this point I don't know. I need to get in there and get across the culture and work out what the agenda is before I can answer that question,'' he said.

On the issue of how News was taking his departure he said: ''They have been very generous. At the moment they are saying nice things about me … they are disappointed but they respect my decision.''

After taking the lion's share of the online search advertising market - which is estimated to be worth $1.2 billion annually - Google has designs on the $570 million that is spent on display ads online.

The managing director of media buying agency Media Contacts, Nick Behr, said: ''It's a sure sign that Google is looking at the display space as an area for revenue growth and their future. There isn't really too much for a new managing director to do in terms of driving search [advertising] as they already have more than a 90 per cent market share.''

But media observers also expect Mr Leeder will face other challenges, among them increasing regulatory concerns over privacy. Last May, Communications Minister Stephen Conroy accused Google of ''the single greatest breach in the history of privacy'' after it was found to have accidentally gathered private data from open Wi-Fi networks while taking pictures for its Street View mapping service.

Most online companies expect Australia to face similar levels of scrutiny over privacy that Europe and the US are experiencing.

And then there is the position of Google's low tax bill. The company pays tax on declared revenue that is about a sixth of industry estimates. Revenue is funnelled to Ireland. In 2009, it paid $714,457 in tax, and made a loss of $4.4 million last year on declared revenue of $110 million - some way short of the $650 million to $700 million the online ad industry estimates Google is writing in revenue from selling search keywords.

A Google spokeswoman said it paid the tax to the right authorities. Tax and privacy were ''among a range of issues that are actively considered by the leadership team''.